Terra Extraneus

While most arbitrators are thoughtful people of deep consideration, to remain so they must never lose sight of the fact that their deductive powers are not evidence and things are not always as they seem. That is especially true when trying to use the facts of a case not in front of the arbitrators to decide the one that actually is in front of them.

The United States Court of Appeals for the 9th Circuit issued an opinion last week in Collins v. D. R. Horton, Inc. holding that arbitrators can rely upon what in Oklahoma is now called claim preclusion and issue preclusion, more generally known as collateral estoppel and res judicata. In the case before the 9th Circuit, however, the court was actually affirming an arbitration award in which the panel declined to give determinative weight to a federal trial court verdict because it was on appeal. The 9th Circuit pointed out that the arbitration panel could have deemed the federal court verdict preclusive rather than disregarded it because it was on appeal.

However, this ruling does not reach the far different question of whether the outcome in one arbitration can be used by a subsequent arbitrator or panel to determine the outcome in the latter arbitration. Generally, arbitrators have been trained to believe that one arbitration is not precedential in another. The 9th Circuit did not change that axiom.

Arbitrators of the thoughtful type will continue to apply collateral estoppel, claim or issue preclusion, with great care, even if the prior verdict comes from a court. Unless the arbitrator studies the pleadings from the prior case minutely to determine if there is an identity of issues or claims, and sometimes the transcript as well, it should not be assumed the issue before the arbitrator was, indeed, tried. [Hat tip to Professor Ross Runkel and his Employment Law daily reports].

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The number of incarcerated persons in 2006 was 2,245,189 according to a department of the DOJ, found here. At the end of 2005, there were 4,900,000 persons on parole or probation. Of the offenders on probation, half were felons. 94% of parolees had been sentenced to more than a year in prison.

Anyway you look at it, that is at least 3 or 4 out of every 100 persons, 3% to 4%, is a felon in the United States.

Who cares? Trial lawyers had better.

What prevents felons from registering as voters? What prevents felons from being selected for jury duty?

The answer to both questions is: almost nothing.

Federal statutes preclude persons charged (not convicted) or convicted of a crime punishable by more than a year in prison from serving on a jury in a federal court house. But, the law requires the local federal district court to implement the statute. Most local federal district courts in the United States rely upon jury questionnaires to weed out felons. The assumption is that felons will not return the questionnaire and not show up, or will truthfully disclose their status. The assumption is that voter registration systems will, relying on the same approach, weed out felons. Both assumptions are going to be tested as the number of felons in our society escalates at rate of several percentage points per year. This is especially problematic in federal court trials on the civil side wherein voir dire is the exclusive province of the federal judge.

The voir dire problem, too, will aggravate the problem because even more prospective jurors than ever before will have friends or family that have been caught in the judicial machinery. There is no longer a complete consensus in society that predominately governs how people will react to felons.

State and federal court clerks are going to have to be given computer access to the criminal record databases used by law enforcement to track arrests, convictions, paroles and probation. State and federal court clerks are going to have to screen prospective veniremen.

Arbitration forums are going to have to implement criminal record disclosure into their systems, too. While arbitration forums may not have access to criminal record databases in every instance, they will in some instances. For example, nearly all adult criminal convictions are accessible on line to the public in Oklahoma. In some states like Texas, there is much less access publicly available. While it may not be illegal for an arbitrator to be charged with or convicted of a crime involving more than a year of imprisonment, it probably should be. Indeed, some courts would likely impose that standard on arbitrators simply because it is already imposed on federal jurors.

Until better screening tools are available, trial lawyers, when they have sufficient resources, are going to have to screen jurors and arbitrators as best they can. In many cases, however, for the time being, it simply will not be possible.

Some wags will argue that it is not a problem until it happens. Too late, it has happened, and will happen with increasingly regulatory. Mistrial is a pretty expensive remedy.

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I recently saw an article which quoted the “Dean of the American Institute of Financial Gerontology and Associate Director of the Gerontology Program at the University of North Carolina-Greensboro.” I was a bit taken aback by the term “Financial Gerontology.” I was also taken aback by the fact that there seemed to be an institute, a think tank, I guess, that focuses on the financial issues of the elderly, and uses the term “gerontology” to do it.

Apparently, for financial advisors, there is a body of study that is developing that will guide advice to senior citizens and their families. I wonder if from this will come new “principles” regarding suitability, especially in the area of variable annuities? The magazine Registered Rep interviewed the “Dean” of the think tank that by his title I was so intrigued. The web site at the University of North Carolina-Greensboro was thin on details but touts its 36 hour masters program as beneficial to financial advisors, but provides no details. The “newsletter” of the gerontology department was a “dead link” on the website and had not been updated since November 2006, in any event.

Thus, it would seem this idea of “financial gerontology” is still incubating and probably not quite ready for prime time. Nevertheless, it no doubt will develop further and is worth watching.

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